Marvell Technology (MRVL) 30 Nov 232024 Q3 Earnings call transcript

Good afternoon, and welcome to Marvell Technology Inc.

Third Quarter of Fiscal Year 2024 Earnings Conference Call. [Operator Instructions]. Please note, this event is being recorded.

I would now like to turn the conference over to Mr.

President Relations. Vice Senior Saran, of Investor Ashish Please go ahead.

everyone. Marvell's Third you, and Quarter to afternoon, good Call. Thank Fiscal Welcome XXXX Earnings

today Marvell's Murphy, our are and me Meintjes, CFO. Chair Willem Joining CEO; Matt

that today filings. certain we risk subject and Please posted our review factors current are risks most actual Let earnings me our website with to significant well on update remind and comments contained not SEC today materially as press statements, to could include release, that our uncertainties statements expectations. to filed differ the made and results cautionary which forward-looking recent cause the management's everyone which forward-looking XX-K We in as intend statements. our our and do XX-Q from

to refer certain and Relations will we non-GAAP our measures. section reconciliation in today, call financial of our non-GAAP the A GAAP is between measures available Investor website. financial our During

to quarter. his me call for comments now Matt the over on the turn Let Matt?

afternoon, everyone. Thanks, Ashish, and good

of revenue For midpoint third sequentially of of guidance. XXXX, the X% growing quarter above the billion, $X.XX fiscal Marvell's

midpoint In our non-GAAP EPS the drove basis, of Marvell and remained increase above operating gross sequential margin, $X.XX, the a a in disciplined delivered addition, guidance. on team on expenses of

results our We are execution. pleased with and

for In by above was our our stronger revenue. the guidance, than market, data center $XXX end revenue driven quarter third million, well forecasted AI

the grew excess in to On in a growth. XX% cloud quarter, sequential grew year-over-year also data are returning revenue overall center by XX%. We revenue from encouraged while of basis, well third cloud

depressed storage industry push the third have Demand weakening center on-premise expectations of continued data in for market from and for also end recovery declined demand. enterprise revenue sequentially reflecting the remains portion expected, data center out. to As quarter, our

well was standard led as revenue cloud cloud, Teralynx, infrastructure our Growth or DCI our AI with grew Data AI growing products. Ethernet Interconnect by PAMX significantly switches faster. as products, Center and sequentially optical broad-based, both In from

[ AI. by with portfolio, customers bandwidth, their using optical long-standing infrastructure. a released required highlighting product built Marvell's are enable we has video a NVIDIA Earlier interconnect upon generative ], technology Marvell our computing our collaboration accelerated relying reliability to power today, the and which broad to we're scale

for We AI to correlated our of our in growth systems PAM AI shipping tightly gig strong electro-optic products demand in PAM of from are XXX currently the X:X products than being accelerators deployment high-performance in benefiting -- the market. accelerators, higher to

XXX started past are that We seeing for gig strong platform this also our X.XT lane sampling customer we PAM traction next-generation per April.

our we are solution Some customer into X.XT ] ramping production. to looking began qualifications and forward [

our next AEC Complementing solutions the year our expect ramping optical we active electrical fiscal PAM in start to X cloud our deployments. or Tier DSPs in for market cable

gigabits our in per We XXX Summit at OCP second, the Global October. held long-reach also demonstrated SerDes

next-generation as will gig AECs. a this serve per that expect block for technology lane We XXX our building

latency In full on demonstrated cloud next-generation low XX.XT very switching our industry-leading platform. with at are operating capacity SONiC. we we switching portfolio, OCP, XX.XT our solution, making Marvell's running great At on progress

this open cloud of [ customers ] ecosystem. SONiC network value solution, XX.T flexibility, we Meta started is scalability to who source and enabled agile important for our and Our system on Ethernet forward and have the operating development into an open look interoperability very Customers production. ramping Switch platform

innovation AI. including cloud Ethernet-based for step the driving in generative continuous Ethernet our on this open next-generation Ultra an fabric, In which deliver can scale commitment and announced to Consortium. is membership week, addition, workloads, This in performance earlier our the we required another

components between platform, the single based a October. launched or silicon past modules integration DSP over signal in ] density Marvell's new of modules and to operating DCI products These As our coherent to applications. X long XXX modules This photonics gig are years the integrates a on XXX-gig we [ also we drive this accumulated required discrete multiple our seeing factor hours are DCI ramp, strong distances for X-nanometer next-generation billions platform continue form SiPho device. our centers. high-bandwidth interest past of XXX-gig that pluggable across in enables for performance level data small packaging SiPho within has which

starting In We this addition, higher we look connections field-proven investors as emerging to SiPho our and are data power opportunity to over applications see time. to forward centers. optical bandwidth updating next-generation for technology unfolds inside

custom their solutions already AI have their enhancing of customers and a designs. remain Cloud offerings won number building we own, compute focused these on by of

started under X AI and key We project wafers have of production. qualification have completed

first we another is looking fab testing positive. from silicon and the back For have received project, the initial

next a both to programs year. we start these expect result, production volume compute of As custom

now the mid-XX% market. range on from our expect data data guidance fiscal overall center Turning we In our call, fourth in end market the earnings quarter XXXX, our end In of to for sequential to we center cross revenue a grow quarter last come Since basis. quarterly million run to year. fourth our to rate demand to continued revenue this exiting AI now has and grow, significantly forecast. above we our revenue then, for forecast the in $XXX a in expect provided AI a

growth we In expect in also strong from sequentially revenue grow from the fourth addition to quarter. infrastructure AI, standard to cloud

center the data For in portion enterprise decline the market, on-premise to quarter. of we end sequentially revenue our expect

market sequentially. soft cycles wireless quarter above market. $XXX guidance the million, to market. quarter several and XX% end Revenue the by in product Marvell-specific to our quarters. driven overachievement infrastructure enabled portion wireless was our for XX% of our end year-over-year the entirely carrier the was The have of buck Turning carrier for revenue growing end third a third trend

However, of of would fourth that the as to decline Marvell we quarter above-market this start time XG initial for by for been wave completion. wave growth the some wireless rollout forecasting have

as CapEx Additionally, demand carriers soften a continuing is to macroeconomic difficult environment. in managing are

growth, following extended period an expecting result, are period a digestion. strong multiyear As of a of we

demand. reflecting expect portion decline, our we of addition, the continue weakening In from to markets end to revenue wired carrier

our on a we range mid-XX% in for basis. As to fourth sequential the overall from decline result, end a the expect market revenue quarter, carrier

term and in wireless wired data will expect to to longer markets. continues as Looking grow, the continue intending operators both end to that traffic we need capacity

to expect benefit gains, we in not wins including are base ], station significant also production. but [ X-nanometer have design We won which share from

We revenue are market CapEx from this carrier optimistic over growth. and normalize time, return end that our to will will

Turning quarter to our enterprise declining networking market. end for was sequentially. year-over-year million, XX% the $XXX Revenue and third XX%

As we have been this in end signaling, we weak demand see market.

networking fourth for revenue percentage result, quarter XXXX, basis. project mid-single As decline a sequentially to we on enterprise digits fiscal the in of the a

was the sequentially. to Turning our and quarter third $XXX growing XX% year-over-year automotive markets. Revenue declining in X% million, end industrial and

XXXX, expect revenue of overall our fiscal by a Looking to from approximately decline industrial on end auto basis. and to quarter, we sequential the market fourth XX%

which expect from be includes and We order the patterns industrial can end aerospace our come in decline market, defense, where any given lumpy sequential to quarter.

quarter declining on end quarter, Moving the X% a X% growing basis. year-over $XXX the the mid-teens are third percentage market decline end we fourth million, in to to the and sequentially. expecting our for was market. consumer sequentially on Revenue consumer In from revenue

macroeconomic-induced has on across markets. markets. while serving guidance In us end we growth quarter. control cloud focused to summary, in AI what headwinds and diversification on team driving us. we dealing strong ROI delivered above opportunities continuous fiscal dynamic can inventory the improvement front to markets the of in reprioritized in earnings align our Marvell continued remaining corrections XXXX, carrying many execute end non-GAAP our The the Through from with and softening the environment well other is investments with to We us a for demand revenue environment, through a demand in third of fiscal and midpoint end highest

team inventory drove to across worked best Our our operating the reduce improvements meet well expenses, and with suppliers customers to commitment. combined We've supply manage on and we efficiency are track to our chain. proactively

group to demand rapidly the increase has operations from in Our responded AI.

this we for that of for midpoint the should the half grow first quarter, over X% forecasting revenue year the fourth guidance the of second At approximately are our half. fiscal our

addition, XXX-plus as our cross-functional projection a further fourth our improving a the cost gross quarter. our to in multi-quarter an product in In mix effort sequential are we improvement margin basis non-GAAP well This as structure. point for expectation reflects optimize forecasting

a enterprise revenue to Heading next quarter. typically in the first quarter, while expect don't in into our markets guide impact beyond carrier demand we year, and from we softness

in fourth quarter. the We also consumer market due seasonality end to in completion revenue in the and of program significant demand reduction anticipate a end-of-life an for deliveries

Although to and critical experiencing these carrier headwinds, the the global enterprise are are large markets near-term and markets end economy. long-lasting

So to into recover we over revenue turn tailwind expect them time. our and

as programs is revenue solutions our revenue, the ongoing to tailwinds rapidly, meantime, revenue total quarter. of computing. grow accelerated the emergence inside key expect accelerated multiple XX% AI. fourth data to growing data center additional center We enabler our from data connectivity strength in project the we over driven our data Longer centers of for center to custom compute a in by between our ramp term, the and growth reflecting In of

also number I are to the looking market, Marvell earlier. We products forward as entering discussed new center of data a

With results that, recent and outlook. for detail our I'll call turn to the on Willem more over

and Thanks, Matt, good everyone. afternoon,

auto guidance, of start the at $X.XX our carrier of XX% next center end X%. for XX%, XX%, the followed XX% fiscal billion, declining infrastructure was was third results was market quarter total growing of X% with at sequentially. financial industrial me at exceeding largest quarter Let networking our largest summary with enterprise The year-over-year our third of midpoint XXXX. a in the X% and revenue. and Data Revenue driving by consumer

sequentially, gross improvements. margin XX XX.X%, growing margin points and XX.X%. higher driven gross GAAP basis was was cost revenue Non-GAAP by

was $XXX Moving with expenses costs. intangible on were margin restructuring guidance. costs line of million, negative to operating were Non-GAAP margin GAAP Non-GAAP acquired including compensation, expenses. XX.X%. $XXX operating GAAP operating operating was stock-based expenses operating million, in and assets, our amortization XX.X%. acquisition-related

For Non-GAAP above diluted GAAP guidance. of income third $X.XX, per was share was quarter, the per $X.XX. share the $X.XX diluted midpoint loss

growth along lower and balance from our relative flow was Cash flow sequentially. million in was grew $XXX with sheet. profitability. Now which by better turning quarter significant DSO, $XXX by our to third cash improvement This million, inventory the in driven operations

from the quarter $XX $XXX the end of at third prior inventory quarter. decreasing was by Our million million the

prior XX X days, days from the was quarter. DSO reducing Our by

third Our and was $XX million. our shareholders dividends we returned the of million through CapEx during to quarter. cash million stock $XX We repurchased $XX

was Our $X.XX billion. total debt

X.XXx debt-to-EBITDA X.XXx. was debt-to-EBITDA ratio gross ratio net Our was and

debt we on maturities. down upcoming credit outstanding our our the the our we and average balance. able With decreasing investment-grade rate to new refinancing this rating, while During quarter, were to interest pay debt issued execute used bonds our proceeds

from In we maturity debt years our increased to addition, X.X years. average X.X

the As $XXX of quarter, the quarter. increasing end third fiscal prior our million were from equivalents million by cash and cash of the $XXX

guidance fiscal quarter our the to of for XXXX. Turning fourth

billion, be X%. the revenue minus or to We are forecasting in plus of range $X.XX

gross GAAP XX.X%. the to be our to in expect XX.X% We margin of range

XX.X%. to end XX.X% non-GAAP our projected long-term with the to The to expect We gross of target the be margin of back low be the in our midpoint range to model.

Our our forecast product driven this stronger and a optimization is expectations large ongoing cost improvement by activities. sequential for of significantly mix

that forward, key product Looking any of mix as given expect determinants margin the well remain we gross of our will overall as quarter. in revenue level

project We to GAAP quarter, expenses our to quarter in approximately completion this communicated operating non-GAAP our of For we expense plan first of our fourth million. of expenses reduction year. operating level $XXX anticipate fiscal approximately This the the the $XXX cost we million. be operating reflects be

ahead typical seasonality employee and XXXX, of taxes anticipate merit quarter salary Looking first payroll increases. to we the fiscal in

result, increase digits single high on by percentage basis. we a a OpEx expect mid- to to As

to expense, income debt including the approximately For interest $XX be on million. we quarter, and our fourth other expect

We rate XXXX. the for X% expect increasing X% fiscal to in non-GAAP quarter, tax fourth our of

diluted our weighted to the $XXX million. be range a XXX outstanding be expect $X.XX of per $X.XX of average shares loss GAAP in million We diluted per our share of shares anticipate earnings share. to outstanding basic We to gain average a and

We range in $X.XX. of diluted income to expect per share non-GAAP $X.XX the

you. and line Operator, Thank the please instructions. open announce Q&A

[Operator our Hari question from of first will Goldman come Toshiya Instructions]. Sachs. And

the had sounds a center multipart outlook I days ago. improved It Matt, on your XX has business. data question like since

be of excess QX, where the 'XX, in speak can you you you us like you the the million helpful. be but importantly, outlook October then your across sounds can into visibility size landed business as there. well quarter, Just curious would calendar have business the AI optical for as $XXX if how that compute you'll it And in in more to if business,

and strong growing you very rate QX over back the in QX, as the noted, grew business for up X question. performance the is AI as nicely. our and is and into for a continued pleased those growth in be by of statement Toshiya, We're data probably of softness, some the now piece that the into so we're well trajectory, that traditional in broader And both than come us of persists is will and with weakness it overall year. driven next very market drivers the AI center mix XX%. see That's a third in the $XXX time, much segment that very guiding us. XX%, In Thanks, We quarter. is for cloud is the that cloud higher fourth this it's north QX, also on-premise but million. well for now exit it positive and encouraging quarter infrastructure is piece of the very What's Yes. driving

as but are as fiscal for in year, of as you've we programs. matter in we the been we talked the next our as and in area, strong product new saw of on the prepared made infra that my the strong to for there. then we well ramp plan for starting And the remarks, there cloud current well head most I next silicon And tracking development into has and progress growth growth optics ramps seen, custom in year about year AI

So quarter how fourth of Marvell next you think stronger well the year resizing for as what much, performance you we when those quarters clearly specifically, signaled much those back. about is first not while than AI -- couple in a we're the opportunity the would as

results, well. So things days from business, quite compared I are as ago, data doing you overall think as And I the you aggregate nicely. to think XX can our center see tracking is said,

of Arcuri UBS. comes next The from Tim question

question. a also multipart I had

So networking the up. going reporting to are the their be And fiscal going down XX% about QX. customers that levels are peak from still is enterprise though in inventory actually

another about revenue down. grow? data do fiscal also talk segment? So supplier. be can then that on would revenue you is from center this is can dynamics But And up. Marvell you think total the you down can going that networking in for product? just product carriers Is And this Do that up? think you know be still said I and that QX,

and problem. no Thanks, Yes. but X-parter, creativity the appreciate the Tim, on

even of it's the the continued think it's heavy to On still enterprise pretty if balance been year going OEMs come enterprise I out come to there. year that since you going I saying, down hard side, look, was from sheets down. just back We've December mean last are to this comment. and to

some level projections at at a level, the weakening well there there's end you as both see think inventory of I combination out market the management and the a OEM from as of more softer demand environment.

significantly good very business in couple our first of grown years great and position. last the feel still we about years was So this We had just half where the it years had of from few even a We this year. ago.

we I than more than the a at be So kind cycle. the you has would a longer deteriorated time. would but inventory of we're going taking if normal It's what correction environment year, back little bit and have to of the that went the we also macro through thought anticipated think beginning

to that through the we that for we it so see and And work quarters. of having next down, issue couple see

specifically, QX, looking you're while On I don't we understand for. guide what

we and down. customers now thought I program And been largely so seem about on there I better the some CapEx fourth had that, stepping is information. would then little think going to buy very year. down this down is did to talked run bit telco Carrier having last about a stay The after conclude and trouble. time We have in end in it quarter, see the way being there. a that's enterprise guess really is the we The has actually going out and gave environment I than which think weak. to constrained great spending to it consumer, be and a we that the

revenue a as I The And revenue the kind the business when are firing these kind all really the down. to strategy tailwind how real cloud kind that it's is this that the down is that then to that you offset of on way that's our coming happens, normalized to when the to base in that working cyclical that's a though, lot rate of got time. growth. to early a that EPS downturn of had carrier we've had of that ]. is revenue at it strength continue? we thing too come about and they it is it's in if a And just does and strength returns over -- and last is our the add going these of this in on data of come QX. your tailwind you these and and design will up, So will call, half about to your win think Marvell as enterprise back AI much [ we've but think question a And diversified say, because design solid the of would well to will have juncture be position is growth that's that such recover, to on meantime, all and run center And

So there. a lot of information

You on about but you guys up have model, to your hopefully, are gave going it. own to some with think pieces how to that

Next of America. from Arya of question Bank comes Vivek

it. business, center, is business. we think the is to value value Matt, The for well optics us challenge the data the of ASIC in and I so I still your think, how appreciate understood

the the $XXX and value is and So we Because value years? very this what or what potential, the talking of a X we unless appropriate million Are have visibility we more $XXX business for Marvell year? customers? X give the year? business. are way just it Like to to what to million for next X and $XXX million or X it's it visibility Is million, next sizing How is is customers? growth this next hard $XXX talking good

about what So the us Can year? lumpiness the really swing just is your help ASIC could here right you think business? you understand next way sales your

Vivek. Thanks, Yes.

think couple it. ways think a I of to about

The there. it's there's it. And just kind the probably that drive the of that's you've companies if out opportunity highly silicon just TAM really the silicon, can last first seen people industry about design, just on being There's in there's weeks, across by customer handful concentrated, opportunity, think partnerships you is of a And to number few of silicon. their like people there, announcements are doing the own partners whether who a Marvell, it's announced, going their that that, AI, been own strategic typically participate. tremendous are around behind that

a activity, of I'll to see would from do say get is to really of see accelerated you So the can I one and traditional we silicon it architectures up your lot statement, broader computing, TAM question, custom that. as piece opening the even then computing is moving

And a TAM so we larger going that believe will of portion forward. the be

the you by help was to put optics about and could you point, be. your and math we remember, original AI most of on this this. way, optics million a in sort When back, $XXX we that then would $XXX about year area. out AI if Well, opportunity, optical million would already be size difference it growth, quarters investors the might total to of year, That sort million. of next about the said we year the on what do of another couple we would do revenue, signaled you that talked assume so some we this And had sizing, about our do $XXX driven bogey

product the significant big But on in say chips I Now would of our a just for been we've be out development I AI's know and And optics not still ball yet. for this the investor about would position It's made and are about think is we I've fully this. how what we year. can the ramping. it this appetite between X us higher terms now say actually to customers, can getting in I is, through to understand early, yet how now and fab. the next investors The be than of back months, and bigger got on a big new -- we're piece call silicon taped the then. don't Vivek. to saying fully steam head progress starting was not opportunity custom for

as and need higher. to probably side the it's about from more for a X AI bit optic I'm what much, on on size And So the But was side. to to when can out you. what year, time little looking is talked custom we quarters I opportunity much that's going the next well say both first that back as

I news pretty you that and is hope good But I it's but going direction. on. as what's positive in a helps. the the all a see moving it's dynamic question, So market understand very upward

Piper comes question Sandler. next Kumar from of The Harsh

Yes. Great choppy tremendous and environment. very execution

think confidence what is was on for sequential curious the the to guiding down down of if question are more do Matt, the returning first. both So perhaps And you I taking and us one you can the hit. pieces mentioned I you side, growth a about have you help carrier wired of a part which was in, And think wireless on in down. the basis. you're bigger back mid-XXs terms significantly

choppy And think And Thanks, whole be just $X over been carrier, think $XXX going infer to coming Yes. It it year, off QX. Marvell. business Look, of million. like very, you we're I the billion you if on for -- I is environment, a very point out. strong kind as Harsh. a have a was it's

that judge And third be you peak of trend, would you a sort if XG performance the over back been our I quarter bucked that here. the if it would through. story us. go been the to would couple be remember, on fourth and last So and the to of that's think of trying for signal for that stuff, attempted calls, we've quarter to signal investors -- some success the we've that then take time we -- there Clearly, some to

return carrier volatile over is. but lumpy So segment of that time, as Marvell. normalized a carrier it's -- It and rate, usually back a those strong are both very is will run segment to for

hard both know say I would they're back. -- come the to these. on on going to it's just when timing, It's think exactly I What

the is I think in segment the tough. predictability

on think one So The say this stations And to the pandemic back both -- and is revenue exact sooner. side, an led out performed this. design those down has our as have I time answer segments. for infrastructure, carrier by year. I'd for with trending the comes XXX-gig have I I us carrier some extremely wired base wins are has of of Layer X well wire incremental DSPs way, drivers us on come wired going been come we infrastructure the for content really the some new XG carrier wireless build One incremental in stuff it don't when those processor be think on when back, which opportunity waned. that and back has also we new does for for

that to unknown. But over is will still of the of that time Marvell rate. normalized core would the is part return of base just timing I kind Marvell, So this a say a of business part run

Tore from Stifel. The comes of next question Svanberg

you But be Yes. yes, mentioned little NVIDIA do multiyear a a more could and additional assume this the us Matt, website, means. color partnership. what you partnership, the I share video and this is any your on could great. color bit exactly but would I you appreciate on with add Marvel

Tore. Thanks, Yes.

across number a the today, posted was opportunities, it the by between captures of very X I companies think think, relationship yes, video really, a long-term just of I the sort way. working but

help complementary them and partnership we've of goes and really for their we've products. to to optical in and area, had their working even enable In very working applications. with Mellanox NVIDIA strong back with been think this some I with time, them the some a

of to, together I for signify down kind work opportunity a really of way highlight was us lot opportunity. there's and together on also think, of AI this done that a this the So we've years just double to

of what's to a -- the a proud just long-standing growth. It's really their companies. it. of It's not per se. cooperation a new we're them announcement not in a or support them behind a and partner there's between recognition So anything X That's be

a networking limited? we've on lately. that kind Since what to starting had decline Great. a to the there? the like the stability seen than question soft business. question, sounds be was sign of enterprise are that still order visibility I is going sequential see the Or better a bit It you're is that very Is a and rates little

I'd say limited. it's still

we're customer call them I think see in about the -- sheets end to demand, when get balance make coming their want I talk still it's we market before little to shape a a bit down. think back there. strengthening robustly And more we

we'll enterprise up, macro. the IT given really next where Tore, ends year, to So have see spending

of full and trying week And and they for so right at their need at taking the and now, I'd say we're just year. But forecast it accordingly. to sort monitoring week, visibility by for we're is what year, looking products plan next we're limited pretty point this

Ross from comes question of Seymore Bank. Deutsche next The

different to wanted to a business and perhaps about it. ask just way split Matt, your I

seems excited that the just first the the XX%, just year-over-year, in I cyclicality, wanted but quarter businesses and is of because come you I reason. think, of get guidance, sounds part that point versus should somewhere are out in and for else think bounce might of good like revenues, if percentage But just the down that, down it deprioritizing. a really I what your took back cloud XX% down I to be the about AI it range. again, at is everybody to is of everything some and

from of those of So versus a how a happens, areas? away out some that Marvell non-cloud focus whenever cyclical expect snapback of we should much

in pretty and different all to historical of is through in. the of this And the our that smartphones back at you year you, super and what this XXXX, gone business, and of sort you longer then correcting that couple And as roaring center example. it's PCs I'd center go declines maybe supply cycle it's quarters just of we've in this times had these and it In an Got cloud, those think it just we last has say sort data like protracted of end Yes, data I'll time lot and later, Yes. as various manner. a dive markets sort fast will. as Ross. you level few year that I you went issues. of started of kind would started we back manner a the earlier a taken characterize out. resetting start in it industry with resets, way if had inventory early this demand And than at I we'll gaming sort if dynamic the saw talked and play work through to year with high the in some to about series in

cyclicality about. the you're that's So part talking

right the or have or our we we come because bets. question, these maybe hey, is, back shifted asking you're of over sort not R&D which time, And do pulled

So the one total. enterprise a for other a business, or various invest than cloud, more ago models, both committed Days that. always as deemphasized, I'd across of we But segments, opportunities And We X in we revenue The be we've that's X projected in say then of this years to including us a case. there's And that portfolio. consumer. the R&D number those that, investments in that Analyst proven then in carrier. the diversified business for declining areas be to are our have back would goes a our our percent offset only our is time, in AI. And within would and really over

going you over that of and piece line. of did us model this to consumer quarters. we one buy you just grow been continue come reason on we've And It's It we kind in trend when the R&D has it going better of been is year. several very Marvell. not to in programs base think forward, and a back. that that's think will year, give during I you time to it the is time be an for invested so And example, had, able have outperformed look really in if about one the to going at nicely And which mode core actually last the

not take is Hope we long-term something still really thing, of the quarter grow take $XX come was segments, into a not that's of to into. is year. it But as years looks and that putting advantage not or helpful. It's market design type and for then, view in an going and Marvell. them rest continue it's the okay for R&D not and that's to we going at that example. growth ago, driver Now to that's because But AI that like And that's we above we're the a like which of opportunity, years probably just back. next can won the the big repeat a cloud million business range of course, going

The Ramsey next Cowen. Matt question comes TD of from

perspective, it's heck of Matt, AI gen that. I to then whole the to a ChatGPT were mean go XX blown the a hear from maybe back a we a and some wanted compute I of is, One couple been custom questions go about months, just up. when to programs you just year and ASIC thing ask of starting back has

that. that, think about So the to base all to react customer had

the you more ASIC programs That's space seen the the using question. them all to doing lean with that silicon flight into merchant, directly are into first change about mix. the or think set that the into part going in be that have been There to in interactions the wanted a customers of the and the I some have and of that large. you more foundries so more themselves? houses you have And of customers limited that Have with in

was a not today, at but The second the announced software. which partnership just part that And of the with space, make at is programs I AI silicon, leads software that at in for look you're volume those programs over you AI of compute, invest when because the customers scale can the custom doing to leader and guys seeing whether time? overall, you you hugely because are successful with as the curious

Yes. reflect to things how you're of much right basically Thanks, I in -- Matt. have year. a think that Yes, it's kind changed

a I pretty think it's simple answer.

mentioned, them all I'd one segments, terms in of are if up the On activity. one, first sort you every the that say, you of those of of will, different

see very to specific at see companies the the you helping market. of to it talking create custom. and mean, for I a it is the ASIC I think, from and guide, some to a custom can of the where somebody them have all actually other look of companies of that because how as from leaders You take can their in advantage large of about are that's numbers of, ecosystem above, say, models, nice even business driver are being a trying like we've NVIDIA, modest for do kind kind that well to, pursue things happening expectations then I from this as which significant the to having all that, unlock figure the of very kind there's out year. on the various come revenue And of to next us of from right, market mix work very, that's think

all. zero-sum of through I'd at that -- hyperscalers, to it's on sort point. a be think I at the the is all and the side And working So activities game customization design with of going those say this roof not

stuff do of networking in excitement both custom around And so all area, and a an that can optics for we the the perspective. lot and then from it.

comment probably not very, software for and well-capitalized to customers that's they're service driving person their companies. sure a also to their need the to they silicon that competitive, custom out the are best that's very than second I'm great But got workloads you've going are for then sure, company I'm more make there and do offerings smart their market. but the the understand what on And the these to do clearly, They and one.

to So I think both are going exist.

last it's clearly to the my of reiterate, where grow more hard pie. in point is to just computing, this not highly a like game. would zero-sum be And It's traditional

this relationship these I that of lot for to there's be emerging think pie companies that's this IP be lot support to going there's opportunity. may created positioning, a lot flat. and hard the the And to right a creates portfolios and at even for of it's what be us, have In customer dynamic very But going juncture. a keep opportunity In of the area, fact, winners it to needs.

Ambrish of BMO. question The comes Srivastava from next

question had Matt, a I on gross margin.

You gave us surprised don't back us negatively XX%. good early in the year, you're counsel, panic. at and you And then

you through in, lower the coming given next So just is wanted have the customer the to margin gross and think is to way typically medium profile maybe corporate to right and margin to for not for think it's you guys, the than the term about company year ]. but but near right profile, the what's now [ year the think for about margin what's

lap one. let take this Will I'll victory on a

So I'm ]. [ bad

so Ambrish, the Yes. question. for thanks

phenomenal it what right? of back has controlling control a Tony ramp been can timing enterprise some [ of at core first done midpoint, our volatile think on in When businesses, we the And environment. really also we've all, discussing the job we pleased networking look scale to next uncertainty in custom. right, the and storage. ] the be and then the to at recovery to the So XX% of team I some a of year, pretty guiding on on the

last clearly, put I'll significantly our yes, would just margin. custom grow to year, margin, while gross year, pressure our remind so a prior business that you, significantly carrier is very we more, on if this next And at gross ahead scaled custom our maintaining basis and on right? relative looking

on view be our and However, that is on EPS. very operating margin accretive they'll

Hopefully, at Ambrish. So yes, helpful, we're that's so it. looking how that's

for had It a Matt, sorry. you, is. clarification quick I

attach changed I than has was X:X? the what about has the changed rate it something in X:X to mentioned You before? -- wondering greater to kind what for just your it dynamic business. was what of pull And push

a been on It's Yes. a topic. Thanks, of Ambrish. journey bit little this

And the I X were really at models and updated we've network. before at building you size opportunity. that, as the to I through how go switch we've had sort -- to help think grown the all up ballparked I of than investors attach out And to think number about greater we updated into rate the we were -- were ago, still it back the look initially. We've think optics think reiterating we it we -- X.X:X X. And this. for subsequent the quarters still we kind this of of and that if in

of a GPUs how bit But big that were could more new doing. how many were against was we this to that actually to think initially, and wouldn't do around say of people how we incrementally I they little hands shift. balance I get wanted thought a that's it know, news. our But clarification going be really was

to a that I more think sort that also clarify. it's think attaching just switch, of between the of optics switch needed reiteration, was you that and to accelerators the the because in but from the will, if not was nuance I layers, we

rate the one of on that's that kind [ So ].

comes question of Sur next JPMorgan. The from Harlan

excess And sequential nearline cloud utilizations normalizing. to drives increasing. then of inventory cloud of by optimized top be in that, your or appears on shipment quarters declines have hyperscale on X and capacity storage After of HDDs you customers, keep to

improvements are think storage I on optimistic XX your customers sequential platforms. on cautiously their shipment terabyte new

I slightly a to pickup shipping about stores data of But signs you've pre-slowdown the sustainable You starting in quarters. guys next guys of sequentially the are growing moving rate your year? storage. see rate been still half into run center on know are few you last

Yes. Thanks.

mean Harlan, even off of build and it's it's it's of right? to down don't think, there think I same improving commentary. aren't customer some And the where any we part little the the come of and this until I'm I of to for again. on think going coming encouraged We, -- least off end call bottom necessarily saw the grown news kind the bottom, really it's out the industry, mean inventory still and one but at it's been I end a backlog the reports electronics certainly of Look, very to very, markets, this it's our units, is those impact I the rough news. see sort that good is see good of you the I races. side, market it's revenues. flattish if off bit.

continued cautiously on hit to downside or say market of us here, So hearing it's kind But come back off pretty gives for seeing are some is in has market and on end this. the any signs to into way we're will the which I certainly grow, next recovery kind the our to got a guide hard But not area and any staying it We cautious and ready but hope normalizing. good with we're call thing. going certainty bottom of year positive, and timing. were pretty it that we're that

question Susquehanna. The next Christopher comes Rolland from of

$XXX below And you you just expectation guys clarify mixed I it third, originally Or year? that double hearing you that $XXX an off silicon guys for goal or XXXX, that wanted of first million number And are Is a XXXX you had million the $XXX where on the then kind of guess, custom had all, expecting something even I'm million $XXX of that? beyond I we kind is you opportunity? long-term this to had or guys signals above of opportunity. discussed. $XXX had? are that to that you million on been like are on Second, that. million

want what to to XXXX hey, Got that's you. had year a the original which back back, and custom silicon getting quarters to Yes, then you're just couple kind $XXX this million. Day, the here's over Investor about? $XXX time, you're asking opportunity, like we going million of reset of I clarify, to

Yes, that's right.

I think that was March. in

million You guys talked about for this $XXX year. that

Yes, exactly.

the from what okay, had because track I And I think at time Investor in the AI. that that $XXX even would of though So shifted this We between be an largely of million, that going had long FY back. AI tracking, a we which some piece $XXX we time never is number back frame. 'XX was the that said in was FY it's close towards kind that frame the -- time and happen still number -- over a 'XX above the 'XX, it that, this wasn't for it bigger of gave 'XX, of back we think quarter And million, I'd 'XX, able that the on was that's to had the between, But at around now gave it, stuff FY before quarter. Day year. we're million. to XYZ of kind exact be should 'XX, to an slide term the say, and said, sometime if of in what and get then yes, $XXX X And quarters was what years or looked that couple you so

around, don't think ago. -- some think any I signals. So mixed update, from think we're any I there's I I but quarter think nothing's there's don't which a enthusiasm changed there's

some production that's think and very and fact, really by year, is you cause in chips -- go would next was, a for respin the if die, risk. always that could I the a extremely customer delay. our to to good large commentary that complex In or looking was remember our are positive thing by hey, are Chris, these either us

sort And is tracking what so far, the happen. knock on to wood, programs they're thought was than just in The given going real growth of largely we're don't AI. bigger be before. issue what gen both the We shape. will that magnitude, we know think these like look but we to we've good it total And seen sized in I

you going there I QX one of bottom? coming last Is One meaningful the think then you drop? the Or at your customers lift do that year. a to have be to the content for some the at additional some segment? Is end of one be could think more going be And carrier. to yet on

Yes.

we get let's is additional on during where kind the are And still going know from don't and remarks, my And next It's think, couple to their where how lift -- of -- where over going then as there'll a content There's got of deployments. we you've go in globally said carrier, sockets. a also But kind carriers lift. of there's time, a the there up inventory be basis. some over on continued be next ends years to share western I think as going going into and years depends, versus go out okay? QX spend look there's at to CapEx the take, really sort the well of suppliers softness the is actually the couple year So to where global it I to to knows suppliers in quarters. market I Chinese relative many of who a

considered. over been factors in understood. to base relatively need of few the of that well number year So there time, yes, there's sort a But has be stations per

a business nascent and solid the ago. years kind going is few And a we content. position content come a for of of because to that think But be will Our it's it will built from back a larger. tailwind I it very us, little have just

comes of from question Next Raymond Pajjuri James. Srini

of couple this a have I point. clarifications at Matt,

on that First, the bit opportunity. custom early size understanding the to it's a silicon, little

Given the think fairly the side, and chain we've complexity that been lead of long. issues these chips I times and the HBM the ] your about are that customers from hearing would Cowal supply on [ the

inventory building to do of you, guess, inventory, should frame are et time when that is, and question my we What to I expect expect kind and start next year? I looking of wafer if cetera. ramp in terms guess, packaging So you

supply is who goes Well, a Srini, the end I to interest this all customers and to chain partners, point. between certainly our now, well. And vested ourselves, happening planning our make your sure think have

a sure wafers I think to and perspective, HBM. of quite we've component necessary team been including required working a we've packaging well kind make that's as kind of third-party got from the capacity

I are all And capacity or programs. either mean starting yes, the of in those that's reserved of we're wafers. I again, multiple there's mean, process

think times we'll -- at call we'll each and have all But was lead point, I think a -- going like to come, March of is answer this point. at visibility. because I sort kind visibility it's given factors other So well what and better much the of product that -- I just is, quarter a better even lot it, have a a when is this look the ago, yes, or not saying different X

I that's we're do pro, to if complexity the So have you wafers. plan the will, some is to of have do you the, you dealing in of of sort guess, with and advance start

that say I time motion. So would capacity is planning kind in ago. has some all of been done of the

comfortable side for that, try in us. But the but opportunity we're of looking just in shape So to is we're we to going are think that size revenue we exactly better we're terms when that get though to is, good even granular have feel for in we're yes, a the on be going investors when on view starting the with process, capacity what but and it's tight. where we to don't I wafers,

customers But follow-up, would especially be other And QX healthy sense. of about down. strong, are to on that my talking you next of be imagine is then as makes said AI And also terms what That kind of to Matt, NVIDIA continue and fairly sounded have guidance. the will to of year positive going continuing your and about data center your obviously, well. half investments in business kind I your

components? my Or quarters, any is last in So is, quarter question trend saw Because X the I and XX% concerned grown is about the at you growth that for in for the in given of the that strength in total inventory guiding mean, that should continues, much imagine business first have business? QX. if overall how looking has this because the that would down the last to even grow quarters business you if what's in the I giving pause are build X about you your revenue

giving what's just for I'm wondering pause that in looking So you growth QX.

Yes, I'll yes. no you little bad here. maybe of No, bit a time problem. give a

trying the then okay? we the first. QX QX we're get things think I to So And call, do first. to maybe first call could

on I strong we've a which do of gave, our you having with very say quarter. market look, mean, we're AI, look kind commentary strong think I would I'd said, being that very, seen the side, if year-over-year, you agree at So is growth expect fourth the I we on growth.

our has And just executing now, dynamic that people I'd on QX. we need I mean just right a see it's that point. say had. I the supply the really some flow phenomenal to job, and QX, And what from team at this So we're up of we're guiding upsides need. done really chain catching right? focused where we're in orders not And

Srini, next demand X But yes, going this think be year Overall things just given with looks not growth is to should be to overall how helpful guide quarters are anybody trying I for moving. good. fast good. now precision, But

my to give when guide prefer QX. I'd we QX guide you So

question will from Wolf. last of Chris come Our Caso

which cloud part like cloud of the It And you or cyclical kind Can product talk an little bit the center. business is coming data to that question in it back on seeing driver what that? a have sounds cycle-driven? the traditional you here. about was to may extent area surprised of is you're of extent -- My

thanks. Yes,

one was believe by market data bandwidth centers, that, had position I and data this of in in thesis out. did build Our out, of traditional which our did And business be lot area switching required networking tailwind. impacted hey, in our predictions put a put to increased the because in fact, to it where played to that's was AI was earlier capability we going optics, cases, in not provide and year, that to the cooperate. think position actually particular, And in it be actually really broader didn't that, was But being you multi-tenant a that that in was had play AI. to the we centers our did handle networking going and might in some shift that cloud even

that bit increased new gig been increased with had at the earlier inventory demand that increased some we for XXX product the cycle correction. there's been in year little our also, in depressed just it's XX.XT on products, that terms and I'd kicking I'd for in of demand added So say a time. demand, say things products But switches,

on up as we new products positive. products combination growth So real a nice a It's have that's sorry. of kind ramping -- wrapping the been well as of strong up,

played driver us for a Chris. So next be should into out, yes, that's nice as and and tailwind that well. year and

you. Thank

maybe think All conclude right, fantastic. we're pretty at going Hey, to just time. call, few a I'm the listen, much I words.

have data data able a carrier I like model final couple what I'm roaring of macro with at over and think of TAMs things. drive strong is our the then an Marvell. some there, our the and put enterprise the to pleased to revert the time view now, that on top would have shows going comments and company. growth together describe focus in and we're AI, and is from foundation lot And in in over with automotive very, as, a And in growth view, which, challenging these of And market that's we and end A I very, infrastructure, our quarter. time. center company diversify you out diversified nice end First, of things the And growth to some I when the years now, have example, to we're TAM we segments with of cyclical in in enterprise seeing large in of the really going opportunity Marvell that some third probably these the in still markets, even inventory of despite offsets in come be end strong the core very in been be And fourth right we've kind our would has like you business are Marvell commitment market, as several we it's ago, carrier. was it strong right? some volatility back digestion that's growth performance. to interest it very believe a It that on those then as that have by perspective driver cloud, growth best the everybody's kind And made appreciate and MIs. while in going quarter that that right to business weakness seeing team

So we point. this can I is and we're managing managing a think at model we're control our environment, what in tough working, and

And meeting. with the conclude Thanks, that, everybody. I will

you now now you for today's has attending conference The and may presentation, concluded. Thank disconnect.